THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JIM SCIUTTO, CNN CORRESPONDENT/ANCHOR: -- David Shulkin soon. Be sure to follow the show on Facebook and Twitter, @TheLeadCNN. That's it for "THE LEAD." I'm Jim Sciutto, in for Jake. I turn you over to Wolf Blitzer in THE SITUATION ROOM.

[17:00:15] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Proposed pardon. President Trump's lawyer reportedly floated the idea of issuing pardons Michael Flynn and Paul Manafort. "The New York Times" says that happened as Special Counsel Robert Mueller was closing in. Why does the White House stress that pardons are not currently under discussion?

Ties to Russian spy? The special counsel reveals that former Trump campaign aide Rick Gates was working with someone linked to Russian intelligence. What does that say about ties between the Trump campaign and Russia?

Under oath. The lawyer for Stormy Daniels makes a move to try to depose President Trump and his lawyer, Michael Cohen. Will the president be forced to reveal, under oath, what he knew about the hush money agreement?

And Kim's surprise. Kim Jong-un surprising the world with his first visit out of his country as leader of North Korea. Did the dictator just gain the upper hand in a possible meeting with President Trump?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, the White House on the defensive tonight as "The New York Times" reports President Trump's lawyer raised the possibility of pardoning the former national security adviser, Michael Flynn, and former campaign chairman, Paul Manafort, as the special counsel built his case against both men.

And President Trump staying out of sight as Stormy Daniels's attorney seeks to question the president and his personal lawyer under oath about a hush money deal with the porn star.

Our correspondents and specialists, they're all standing by with full coverage. But first, let's go straight to our chief White House correspondent, Jim Acosta.

Jim, the president is keeping a very low profile as new developments rock the White House.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf. And today's press briefing was more like a game of dodgeball as press secretary Sarah Sanders tried to avoid answering very basic questions. Whether the president has ever considered issuing pardons for former campaign chairman Paul Manafort and former national security advisor Michael Flynn.

Sanders also offered up the same denials in the Stormy Daniels scandal, which the president appears to be hiding from every day now.

(BEGIN VIDEOTAPE)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Good afternoon.

ACOSTA (voice-over): Dodging nearly every question coming her way, White House press secretary Sarah Sanders struggled to answer whether President Trump's legal team floated the prospect of pardoning former campaign chairman Paul Manafort and former national security advisor Michael Flynn in the Russia investigation.

SANDERS: I did not talk to him about it specifically. But again, I've been in a number of conversations. It's never come up.

ACOSTA: Sanders largely relied on a prepared statement from White House attorney Ty Cobb, who denied that the president's former outside lawyer, John Dowd, raised the pardon idea. Cobb told CNN what he told "The New York Times," which first reported the story: "I've only been asked about pardons by the press and have routinely responded on the record that had no pardons are under discussion or under consideration at the White House."

SANDERS: Look, I would refer you back to the statement from Ty Cobb.

As I said, an on-record statement from the president's attorney here at the White House on these matters has said there's no discussion or consideration of this.

ACOSTA: The president didn't close the door on the possibility of pardons in the Russia probe when he was pressed on the issue late last year.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I don't want to talk about pardons of Michael Flynn yet. We'll see what happens. Let's see. I can say this. When you look at what's gone on with the FBI and with the Justice Department, people are very, very angry.

ACOSTA: The White House also didn't want to address the latest from Stormy Daniels and whether the president would comply with a request from the porn star's attorney to sit down for a deposition in the case.

SANDERS: We have addressed this once again extensively. And we have nothing new to add. And for any new questions, I would refer you to the president's personal attorney.

UNIDENTIFIED MALE: If subpoenaed, would the president sit for a deposition?

SANDERS: Again, I'm not going to get into a hypothetical question.

ACOSTA: Sanders also once again refused to say whether the president knew that his personal attorney attempted to pay off the porn star.

SANDERS: Look, the president has denied the allegations. We've spoken about this issue extensively, and I don't have anything else to add beyond that. Anything beyond that, I would refer you to the outside counsel.

ACOSTA: The White House denied it's hiding the president from the press, something aides, in fact, have been doing all week long.

UNIDENTIFIED MALE: Is he too busy to take questions from the press? Or --

SANDERS: Look, we take questions from you guys every day in a number of different formats, and right now I'm standing up here taking questions from you.

ACOSTA: While Sanders claims the president has denied the allegations, Mr. Trump has not done so in front of the cameras.

UNIDENTIFIED MALE: Is Stormy Daniels a liar, sir? Mr. President!

ACOSTA: It's a question he won't be able to escape forever.

(on camera) -- speak on Stormy Daniels? Why has he not spoken on Stormy Daniels, Sarah?

(END VIDEOTAPE)

[17:05:03] ACOSTA: And the press secretary may have made more trouble for the White House with a response to questions about police shootings of unarmed African-American men. That also came up in the briefing today. Sanders described those cases as, quote, "local matters" that should be left up to local authorities.

But violations of civil rights are also federal matters, making cases of police brutality a national issue.

Now, as for Stormy Daniels, Sanders has repeatedly claimed the president has denied the porn star's claims. You heard her saying that at the very end of the piece there, but to put it plainly, Wolf, that is false. The president has not done so. If we had video of the president denying those claims from Stormy Daniels, obviously, we would be playing them to television. He just hasn't done that up until this point, Wolf.

BLITZER: Good point. All right. Thanks very much, Jim Acosta at the White House.

Let's dig deeper now with our justice correspondent, Evan Perez. Evan, if it's true that John Dowd, the president's now former lawyer, brought up the idea of pardons, could that be considered, potentially, obstruction of justice?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, Wolf, I think there's a difference of opinion among legal experts as to whether or not this would be obstruction of justice. I don't think so personally.

But I think what would change, obviously, is if there's any proof or any indication, perhaps, of a recording or e-mail somewhere, indicating that the president was floating this idea of pardons in exchange for, say, these people not dropping the dime on him, not providing evidence against any crimes the president may have committed.

Now again, so far no evidence of that has -- has emerged. But it does appear that the president has broad powers to pardon people. And so long as, again, as there's no nefarious intent by the president, he can probably do this.

BLITZER: You're also, Evan, learning more about a possible connection between former Trump deputy campaign chairman, Rick Gates, and a person with ties to a Russian intelligence service during the 2016 presidential campaign. What can you tell us about that?

PEREZ: Right, Wolf. This came in a court finding late last night in a case related to Alex van der Zwaan, who's a lawyer who worked for Paul Manafort and Rick Gates. And he has pleaded guilty to lying to the FBI.

Now, in this court filing, the government simply says that a Person A -- they just refer to him as Person A, has ties to a Russian intelligence service. And they say that Rick Gates was in touch with that person in 2016. Now we believe, based on all the circumstances and all the evidence that we've been able to see in these court filings, that they're referring to Konstantin Kilimnik, who was someone who worked closely with Rick Gates and with Paul Manafort. And he does -- has told "The Washington Post" in a previous interview that he has no ties to Russian intelligence.

However, the FBI seems to be sticking to this judgment that there was some tie in the past between the Russian intelligence services and Kilimnik.

And what's important here, Wolf, is that this is the first direct link we are seeing in court papers by the Mueller team directly linking Paul Manafort and the Trump campaign with Russian intelligence.

Keep in mind that the charges on Manafort is facing so far have nothing to do with Russia. They're having to do with money laundering and financial crimes that happened before the 2016 campaign. This is the first time that we're seeing in court papers that the special counsel is making the allegation that there is this link between Russian intelligence and Paul Manafort and the Trump campaign in 2016. This is a contact that was happening in the middle of the election.

So look, I think what -- what we're going to see is perhaps, this is a challenge, or this is a charge that they are going to make against Paul Manafort directly. We haven't seen that yet in the court papers in his case. But we're keeping an eye out for it, Wolf.

BLITZER: So far he's pleading not guilty. We'll see if that stays the same. Evan, thank you for that report.

Let's bring in our reporters and our analysts. And Jeffrey Toobin, let's get to the notion if John Dowd, now the former attorney, personal attorney for the president, actually floated the idea of a pardon for Michael Flynn and/or Paul Manafort. Does that potentially play into this obstruction of justice investigation that the special counsel, Robert Mueller, is engaged in?

JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: You'd have to know a lot more. I mean, "floated" is a sort of mysterious verb in the context of this discussion. If they simply discuss pardons, which is clearly a power of the presidency, I don't think that is evidence of a crime.

BLITZER: What if they discussed it with the lawyer representing Manafort?

TOOBIN: Even a discussion with the lawyer. That in and of itself, just a general discussion.

The problem area would be, if -- if the president said, or through his lawyers, said, "I will give you a pardon in order to shut you up. I will give you a pardon so that you will not testify in the grand jury, not testify to the FBI agents." That's where you get into the area where it might be relevant to obstruction of justice.

A general conversation, I certainly don't think, in and of itself, would be evidence of a crime.

BLITZER: Would there be a problem for Dowd himself?

[17:05:00] TOOBIN: Unlikely. I think lawyers are allowed to talk about legal issues in general. It would have to be awfully specific in the nature almost of a quid pro quo for it to be evidence of a crime, certainly by Dowd.

BLITZER: You know, Jeff, I know you cover the White House. And the president has spoken about these kinds of issues rather roundabout. But I want to play a clip for you. This is what the president said in December when he was asked about a possible pardon for General Flynn. Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: Well, I feel badly for General Flynn. I feel very badly. He's led a very strong life. And I feel very badly, John.

I will say this. Hillary Clinton lied many times to the FBI. Nothing happened to her. Flynn lied, and they destroyed his life. I think it's a shame.

Hillary Clinton on the Fourth of July weekend went to the FBI, not under oath. It was the most incredible thing anyone has ever seen. She lied many times. Nothing happened to her. Flynn lied, and it's like they ruined his life.

I don't want to talk about pardons for Michael Flynn yet. We'll see what happens. Let's see. I can say this. When you look at what's gone on with the FBI and with the Justice Department, people are very, very angry.

(END VIDEO CLIP)

BLITZER: All right. So now we've seen this report today in "The New York Times." We see what he said in December on two occasions. And you've got to assume that maybe he's thinking about that.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Certainly, he was thinking about it at the time. But the context of that moment is very important. Michael Flynn had just pleaded guilty right before that, so the president was being asked about that.

And you can see the president there is almost trying to give his former adviser and supporter a life line there, saying, "I still support you. You did not do anything nearly as damning as Hillary Clinton." Of course, still talking about that more than a year after the election at that point.

So, yes, the president has spoken out about pardons before. The question here is, as Jeffrey was saying earlier, is there some in- exchange for doing something? And it's important to point out that Paul Manafort, the campaign chairman, and Michael Flynn did very different things.

TOOBIN: Can we just --

ZELENY: And Michael Flynn pleaded guilty. Paul Manafort is fighting this here. So of course, it's on his mind. How much he was active in it, we don't know.

TOOBIN: I just -- you know, I haven't heard that piece of video in quite some time. There is absolutely no evidence that Hillary Clinton lied to the FBI. I mean, he said it about four times there. You know, it is just surreal that we have a president of the United States who talks that way. I mean, you know, putting aside the issue of it's a political opponent. But I mean, that is simply not true. If she had lied, she would have been prosecuted, like Michael Flynn was.

BLITZER: And it doesn't make any difference if she was under oath or not.

TOOBIN: Exactly.

BLITZER: If you lie to the FBI, that's a crime, even if you're not sworn under oath.

TOOBIN: Exactly. Exactly.

BLITZER: All this raises an important question, Jim. What information, potentially, did Manafort and Flynn have that got the president's personal attorney so worried that he even raised this possibility reportedly?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, it's a key question. What did Flynn lie about? Right? The lie is one thing. What did he lie about? It was about his contacts with Russians during the transition.

Manafort is facing charges. Granted, for things did he in his business practices. But with pro-Russians in the Ukraine, in a place where a lot of money is laundered, a lot of bad things happen. He was supporting the candidacy of a Russian-backed candidate there.

So you have the crime and then you have the background to the crime, which is relevant to the larger picture of what were the interactions between the Trump campaign and Russia during the campaign? We don't know the extent of that, but we know that at least topically, it is relevant to Robert Mueller's investigation.

We did learn today something about those contacts. And that Rick Gates, his deputy campaign chairman, was in touch, in fact, working with someone who was a former Russian intelligence official. That is relevant, because if you look at the changing story of the Trump world going back months and months, initially there were no contacts. Then yes, there were contacts, but it was just about normal stuff, that campaigns always talk with foreign officials.

But here we learned that it someone who was a former GRU, Russian intelligence officer, and among very close to the campaign. Relevant. We don't know where that goes. They could have been talking about a business deal. But it's at least relevant to this investigation.

Juana, the White House press secretary, Sarah Sanders, today, she referred questions to Ty Cobb, the White House counsel, and would only say that there are not currently any discussions or considerations or pardons, quote, "at this time." Does it sound like she is leaving the door open a bit?

JUANA SUMMERS, CNN POLITICS SENIOR WRITER: So when I heard that, I immediately thought she's saying that isn't happening right now. But that, to me, doesn't shut the door to suggesting that these conversations haven't happened in the past. And I think that's to Jeff Zeleny's point, too. We have heard the president kind of leave the door open, as well, saying that that's an open matter: "I don't want to talk about those pardons right now."

So I think we have to just take Sarah at her literal words she said, the White House press secretary, that these conversations aren't happening now but that doesn't mean that they haven't happened before. And we still haven't needled her more about that.

[17:15:02] BLITZER: Yes, we listen very carefully to all those words that are uttered from the White House podium.

The whole Rick Gates notion -- Rick Gates has pleaded guilty, as we all know -- about this involvement, potentially, it was sort of released in a backhanded way in connection with another case.

TOOBIN: Yes. I mean, you know, we are unfamiliar with a prosecutor's office that is as leak-free as the Mueller office. So -- so you know, there is no place to go to ask questions about what's going on in the Mueller office. But there is -- there was a guilty plea with this Dutch lawyer. And his guilt -- his sentencing is coming up. And it came up in the context of the prosecution describing who his contacts were and what he lied about.

BLITZER: Yes. It's very interesting, because there are a lot of suspicion that Manafort -- that Mueller wanted to send a message to Manafort on this whole notion: "We've got a lot of information. You've plead -- you're pleading not guilty now, but maybe should you reconsider." Go ahead.

SCIUTTO: Just on this point. In February last year, we at CNN reported that there were, that U.S. intelligence was aware of contacts between Trump campaign aides and officials and Russians known to U.S. intelligence. That story was attacked by those Trump campaign aides. In fact, there were Republicans on the Hill who made calls to various people, saying that story was just not true.

Since then, we've seen proof, in fact, admission of multiple contacts. And in this case, not just someone known to U.S. intelligence. There are many people who work in Russian -- businessmen, et cetera, who report back to the Kremlin and the intelligence services. This was actual former Russian intelligence agents. It was known by Gates and Manafort they were working with him. It just belies what has been the Trump world story and the changing Trump world story about those contacts for months and months.

BLITZER: Yes. Let's not forget that Gates was not a, quote, "coffee boy." He was the deputy campaign chairman. And he stayed on in the campaign even after Manafort left.

ZELENY: After Manafort left, through the transition, even indeed, in the first weeks of the presidency, supporting the super PAC from the outside here. So Rick Gates was very central to all this, and indeed, was privy to conversations after the election here. So he is a very central figure to all of this and certainly sends a message there to a Paul Manafort. (UNINTELLIGIBLE)

And I think what this says, this seems to be, it's escalating. We keep saying it's escalating, but there's a lot more activity now. And certainly --

SARA SIDNER, CNN NATIONAL CORRESPONDENT: Yes. Stormy Daniels's attorney back in the headlines again with another headline-making move in his case against the president.

But he's asking a federal court to move the case a little bit faster, and former federal prosecutors we spoke with say that is not likely to happen.

(BEGIN VIDEOTAPE)

SIDNER (voice-over): Tonight Stormy Daniels' attorney seeking to be the first to depose this president of the United States. The White House again forced to respond.

SANDERS: Look, the president has denied the allegations. We've spoken about this issue extensively, and I don't have anything else to add beyond that. Anything beyond that, I would refer you to the outside counsel.

SIDNER: Daniels's attorney, Michael Avenatti, has filed a motion, seeking to depose Donald Trump for no greater than two hours. Among the questions: what Trump knew about the $130,000 his lawyer paid in hush money to keep Daniels quiet about their alleged affair.

Avenatti claims in a motion that a sitting president is not afforded special protection from a civil suit regarding conduct before he or she entered office. He cites the case Clinton v. Jones, the 1997 Supreme Court ruling that compelled President Clinton to give testimony in a sexual harassment case filed by Paula jones. That case has already been cited by a judge in New York as justification to allow a defamation lawsuit by another Trump accuser to go forward.

Daniels's motion also seeks documents directed to Mr. Trump and Michael Cohen, Trump's attorney, on various topics relating to the hush agreement.

MICHAEL AVENATTI, ATTORNEY FOR STORMY DANIELS: We raised this motion with the other side.

SIDNER: Avenatti also claims he had a March 21 meeting with Mr. Trump's attorney, Charles Harter, and asked whether Trump was part of the original nondisclosure agreement with Daniels, the document that is missing Trump's signature.

AVENATTI: And we heard crickets. They don't know. He said they don't know yet whether Mr. Trump was a party to this agreement. How do you not know whether you're a party to an agreement unless you're just trying to make it up as you go along?

SIDNER: David Schwartz, Cohen's representative, fired back this morning in a statement to CNN, calling the motion to depose the president ludicrous. And "a reckless use of the legal system in order to continue to inflate Michael Avenatti's deflated ego and keep himself relevant."

Schwartz says the motion is unusual, because it asked the judge to allow early discovery in the case, before Trump's attorney has substantively responded to the allegations.

All this as Avenatti now suggests, in an interview with Wolf, more women have come forward since Daniels's alleged affair was revealed.

[17:25:07] AVENATTI: I can announce that the number is not six. It's now eight.

SIDNER: He says two of those women have also signed confidentiality agreements.

(END VIDEOTAPE)

SIDNER: Now so far, Avenatti has not revealed the names or anything about the women who have contacted him. Meanwhile, he continues to try this case in the court of public opinion -- Wolf.

BLITZER: All right, Sara. Thank you. We're going to have much more on the legal fallout from the Stormy Daniels lawsuit in just a moment.

Also ahead, the revelation that a member of President Trump's legal team raised the possibility of pardons with attorneys for Paul Manafort and Michael Flynn.

WOLF BLITZER, CNN ANCHOR: Tonight the White House is refusing to answer questions about the requests from Stormy Daniels' attorney to question President Trump and his personal lawyer, Michael Cohen, under oath.

[17:30:35] Let's get some insights from our political and legal experts. Jeffrey Toobin, they filed a motion to depose the president of the United States. Is that going to happen? JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: It's certainly not going to

happen right away. You know, Michael Avenatti, he's -- he's, you know, very aggressive, very media savvy. But I think he's jumping the gun a little bit here.

The first thing that's going to happen, and the most important part of this case, is that the defendants, the representatives of Michael Cohen and the president, are going to try to get this case moved to arbitration and out of court. That's going to be the first thing that the judge is going to want to resolve.

If Stormy Daniels succeeds in keeping it in federal court, then there is the possibility that there will be discovery. But I think the judge is going to want to proceed step by step. And the first step is going to be to go to -- you know, decide whether to go to arbitration, which is something the Daniels team really wants to avoid, because it's more or less a secret proceeding.

BLITZER: They want it -- they want it public. A lot of questions that presumably they would like the ask the president that he might have a hard time answering specifically. One question, "Did you know about the $130,000 payment to Stormy Daniels as part of this hush agreement?"

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Of all the questions hanging out there, and there are many, this is a central one here, because it goes to a potential violation of campaign finance laws and other things.

But the White House was asked about this again today at the press briefing. Sarah Sanders would not answer it. They have not answered it. So we don't know the answer if he actually knew about it.

But we do know the president's relationship with Michael Cohen. We know that their offices were virtually side by side in Trump Tower at the time. And Michael Cohen, over the course of his time as the president's top aide in many respects, has done very little without the approval of the president. So I think it strains credulity to think that the president would not have heard about that at the time.

BLITZER: Yes, it certainly does.

Juana, we know the president did not sign that hush agreement, even though there was a line there. It was blank. There you see it right there, "D.D." That was the pseudonym for the president.

Why can't the White House give us a straight answer when they're asked why he didn't sign it and all these other related questions?

JUANA SUMMERS, CNN POLITICS SENIOR WRITER: Look, Wolf, this is clearly a story the White House doesn't want to be anywhere near, that the president doesn't want to address publicly at this point, despite the fact of what he may be thinking about it privately or how he might feel about it. They're very content to refer this to outside counsel to say that this has been litigated in the past, that the president denies the claims. But what I think has been really interesting here is this is a

president that we've seen and who's been described by people as a counter puncher. We've seen him time and time again, when people attack him, he punches back and he hits back really hard. He hasn't done that with Stormy Daniels. In fact, the people that represent him, White House press secretary Sarah Sanders among them, she hasn't gone on the record to pick apart piece by piece the things that Stormy Daniels said. There's just been kind of this "nothing to see here" approach that I find, frankly, quite interesting.

BLITZER: Everybody, stand by. We have some breaking news.

All right. CNN has now confirmed, thanks to the president of the United States, and a tweet from the president of the United States, that there is going to be a new secretary of veterans affairs. There you see the tweet right there: "I am pleased to announce that I intend to nominate the highly-respected Admiral Ronny L. Jackson, M.D., as the new secretary of Veterans Affairs." And then goes on, next page, "In the interim, the honorable Robert Wilkie of DOD will serve as acting secretary. I am thankful for Dr. David Shulkin's service to our country and to our great veterans."

Jeff Zeleny, immediate reaction from you?

ZELENY: Well, that certainly is an interesting development. The president, we have been told, did not want to fire Secretary Shulkin before he could hire someone else. Hiring Dr. Ronny Jackson, certainly interesting. He knows the president very well. He's his physician. There is, you know, fewer people who see the president as often.

The question here is, the president, we've known for a long time. Juana, you've done all the reporting at the V.A. It is a troubled agency. For all the time we have focused on the H.R. aspects of, you know, the dysfunction there, the core of the agency is a problem. And I am told the president is really disturbed by this, and he wants some changes there. So we'll see what happens.

But we have been waiting for this for some time. And all the reporting you've been doing -- in fact, we were just talking earlier. You suggested it might happen while you were on live television, and that's what happened.

SUMMERS: And here we are. Yes, Wolf, as we've reported, myself and my colleagues, that this has been that's been going on for some time now. And this decision by President Donald Trump to replace David Shulkin, who served as undersecretary of health under President Obama, comes against the wishes of most of the nation's major veterans service organizations.

[17:35:13] I spoke with a number of people yesterday. They were expecting to meet with Secretary Shulkin tomorrow. They say that they believe that Secretary Shulkin has been a good ally. That while there have been some distractions in the agency, including an inspector general report that faulted him for travel derelictions, they believe that, you know, he was a good ally. He supports keeping America's veterans healthy and does not support moving more care for veterans into the private sector. Many of these groups concerned that a replacement could indeed do that.

BLITZER: You know, it's interesting that this is the second cabinet secretary within only a few days. And you can see all the changes that have been going on.

But once again, Rex Tillerson, he was informed by Twitter. And now Shulkin, the president tweets he's gone, as well. Not a huge surprise. He'd been in trouble for -- for a while. The White House press secretary earlier in the week didn't express a lot of confidence in him, but now he's about to be gone.

TOOBIN: This is just consistent with the level of turnover in the Trump White House, which is an order of magnitude different from any previous administration, Democrat or Republican alike.

The question, I guess is, who cares? I mean, does the public really care who works in the White House? Who the cabinet secretaries are? I think the question is, are these people going to do a better job for the American people? I don't know the answer. But the turnover really is extraordinary.

ZELENY: I think you have to ask yourself at the outset what experience does Dr. Jackson have in running a massive agency like this.

But it's clear, we have seen a pattern now. As the president reshapes his administration, he picks people he's comfortable with. And he has had a long time -- few people, I would argue, have spent as much time with him as his physician. We, of course, saw him in the White House for that long, extraordinary briefing saying how healthy is president is. The president likes him, and perhaps thinks he owes him now

But he will now be running this agency. But it doesn't mean the problems at the agency are solved. In fact, it will probably shine a brighter -- brighter light.

BLITZER: Dr. Ronny -- Ronny L. Jackson, M.D., he will become, assuming he's confirmed by the United States Senate, the next secretary of Veterans Affairs. Shulkin gone.

A lot more on this coming up. Also other news, including more on "The New York Times" revelation that one of President Trump's lawyers raised the possibility of pardoning the former national security advisor, Michael Flynn, and the former campaign chairman, Paul Manafort.

Also coming up, secret meeting revealed. What did China's president tell North Korean leader Kim Jong-un?

(COMMERCIAL BREAK)

[17:42:20] BLITZER: We're following multiple breaking stories. President Trump just now announcing via Twitter he's replacing another member of his cabinet, Veterans Affairs Secretary David Shulkin. He's nominating his White House physician, Rear Admiral Ronny Jackson, to become the new secretary of Veterans affairs. More on that coming up.

Also breaking at the White House this afternoon, the press secretary, Sarah Sanders, telling reporters that in the wake of Kim Jong-un's surprise meeting with China's president in Beijing, the Trump administration is cautiously optimistic and feels things are moving in the right direction.

CNN's Brian Todd has more on the North Korean leaders' trip to Beijing. Brian, what are you hearing from your sources?

BRIAN TODD, CNN CORRESPONDENT: Wolf, they're saying that Kim Jong-un has without a doubt been bolstered by this secretive trip to China. He has a new feeling of confidence heading into a summit with South Korea's president and a possible meeting with Donald Trump. Tonight, every video clip, every statement coming out of this extraordinary meeting in Beijing is being picked over by intelligence agencies.

(BEGIN VIDEOTAPE)

TODD (voice-over): A surprise meeting: the most secretive leader from one of the world's most dangerous nations makes his boldest diplomatic leap. On his first trip outside North Korea as its leader, Kim Jong- un has his first meeting with another head of state, a face to face with his most important ally, Chinese President Xi Jinping.

MICHAEL GREEN, FORMER NSC OFFICIAL FOR KOREA: This is a diplomatic coup for Kim Jong-un. He defied the U.N. Security Council, repeated sanctions. Tested nuclear weapons and ballistic missiles. And at the end of it, he's getting summits and respect from the leader of China, the leader of the United States.

TODD: A legitimacy Kim is said to crave. And to bolster that image, his glamorous wife, Ri Sol-ju, appears by his size, along with Xi and China's first lady.

SUE TERRY, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Kim Jong- un is trying to look like a modern, young leader of a normal country. And here, he brings a beautiful, young wife. The optics is great. You're standing with Xi Jinping and his wife. The four of them looking great. I mean, and this is what Kim Jong-un is after. The image makeover.

TODD: But Kim has also come under more pressure than ever to make a diplomatic move. Heavy sanctions recently leveled by the Trump administration, experts say, could start to really squeeze Kim's regime.

GREEN: It will squeeze their cash. It will take away money that the leadership needs to keep the army and the elite loyal.

TODD: Another factor that could well have turned the young despot from an aggressive field marshal, brandishing his nuclear warheads, into a would-be statesman: an adversary whose erratic impulsive nature rivals Kim's own.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: They will be met with fire and fewer like the world has never seen.

TODD: Donald Trump's tough talk and name calling. His implied threat of a first strike against North Korea, experts believe, has thrown Kim off his game.

TERRY: I'm sure Kim Jong-un's regime was very rattled by bloody nose, limited military strike, all this rhetoric coming out of Washington. So I'm sure that played a factor in terms of Kim Jong-un trying to -- deciding to come back to the negotiating table and meet with Trump.

TODD (voice-over): Tonight, a warning from a veteran negotiator with North Korea. Beware of the claim from China's official news agency that Kim told Xi he was committed to denuclearization.

MICHAEL GREEN, SENIOR VICE PRESIDENT FOR ASIA AND JAPAN CHAIR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Utterly meaningless. The North Koreans have been saying that for years. And what they mean by that is when the U.S. ends its military presence and its nuclear protection umbrella over Japan and Korea, then and only then North Korea will think about denuclearizing.

It's something that negotiators, including me, have heard for years and no means nothing.

(END VIDEOTAPE)

TODD: And another word of caution from analysts tonight. They say China is now reasserting its influence over Kim Jong-un and his regime. That could actually help bring down tensions on the Korean Peninsula, they say, if the Chinese can actually get Kim to scale back his weapons and nuclear programs.

But they also warn that the Chinese could use the situation to try to weaken the alliance between the U.S. and South Korea, Wolf.

With us as now, CNN national security analyst Samantha Vinograd, who worked on the national security adviser's office during the Obama administration; Christian Whiton, who has advised the Bush and Trump State Departments.

Guys, actually, standby. We have a lot to assess on this important visit. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

[17:51:09] BLITZER: We're following multiple breaking stories. President Trump just now announcing via Twitter he intends to replace Veterans Affairs Secretary David Shulkin with the White House physician, Rear Admiral Ronny Jackson. Much more on that coming up.

We're also following North Korean leader Kim Jong-un's surprise visit to Beijing and his meeting with the Chinese President Xi Jinping, a meeting that has left the Trump administration, quote, cautiously optimistic. Let's assess with our experts.

And, Christian Whiton, you're a former State Department senior adviser. Let's talk about this meeting. President Xi warmly welcomed this North Korean leader. Can this be something that could turn out positive for the Korean Peninsula right now?

CHRISTIAN WHITON, FORMER SENIOR ADVISER, UNITED STATES DEPARTMENT OF STATE: I think so. Well, it's an important, I think, prelude to the meeting that's going to take place or should take place between Trump and the North Korean dictator.

It was essential for him to go for protocol reasons to Beijing first. You can't just use Beijing if you're a North Korean leader having never been there, to a fellow communist party. You can't just use it as a conference center. So the protocol of being received, the state visit, that happened.

Also, another important product was that China reaffirmed what we had previously only heard from South Korea, which is that North Korea does, in fact, want a summit. We haven't had a formal announcement out of Pyongyang yet. But, you know, all of these things, I think, speak well of the prospects for diplomacy with North Korea.

BLITZER: There's some positive movement unfolding. There's this meeting with the Chinese president, supposed to be next month meeting with the South Korea president, President Moon, and then followed in May, presumably, a meeting between Kim Jong-un and President Trump.

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Certainly, but I'm going to have to disagree with something that Christian said. The optics here really worry me.

I agree that Kim should go to China, has to speak with President Xi, but Kim got a full state visit in Beijing for basically doing almost nothing. This was another P.R. win for the North Koreans before they've actually done anything.

And it looks to me like Kim Jong-un is driving this ship. The United States used to be the director, producer, and the star of every coalition against North Korea, including the Trump administration's pressure campaign.

And now you look at the President's tweet. He received information from President Xi on what happened. We are no longer in the driver's seat, in my opinion.

BLITZER: What do you think?

WHITON: Well, I think, you know, we've already accomplished something big because before, both the Bill Clinton administration and the George W. Bush administration, which I served, essentially had to bribe North Korea just to get to the negotiating table. You know, with --

BLITZER: How'd that work out?

VINOGRAD: Right.

WHITON: Exactly.

(LAUGHTER)

WHITON: We gave them billions and billions and they took the goods. And they, hey, gave us a deal, they just didn't deliver.

BLITZER: Yes.

WHITON: And so just getting North Korea to agree to meet and also to put their leader out there, which didn't happen in previous negotiations, you know, it's -- there's going to be give and take in any negotiation. So I wouldn't say we are in charge but, you know, a lot is going our way.

Also, just recently, we announced a major breakthrough in the renegotiation of the Korea/U.S. free trade agreement. That sounds arcane, but that means we have resolved a big point of disagreement with our key ally in this situation.

BLITZER: Things seem to be moving in a positive direction.

VINOGRAD: They could be. I don't think we really know, Wolf. We've seen the North Koreans abuse negotiations before. I think the pressure campaign has been very successful.

So what we need to see next is how this meeting between the North Koreans and the South Korea go -- South Koreans go and if Kim is actually willing to come speak with President Trump and have a substantive conversation, rather than just another P.R. gaffe.

BLITZER: I wonder where that meeting will take place.

VINOGRAD: The whole world will be watching. Guys, thanks very, very much.

Coming up, breaking news. President Trump is replacing yet another member of his cabinet. The Veterans Affair Secretary, David Shulkin, is out.

Also, President Trump's lawyer reportedly floated the idea of issuing pardons for Michael Flynn and Paul Manafort as the Special Counsel was building a case against them. Does the White House have an explanation?

[17:54:49] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Ousted by Trump. After weeks of speculation, the President fires his embattled Veterans Affairs Secretary, tapping the White House physician to replace him. We're learning more this hour about the newest shake-up in Trump world.

Russia probe pardons? New reporting tonight that one of the President's lawyers suggested pardons for Michael Flynn and Paul Manafort as the Special Counsel was closing in on the top former Trump aides. Was it an attempt to keep them quiet?

Protecting Mueller. After Mr. Trump attacked him by name, there is renewed anxiety within both parties that he might try to fire Robert Mueller. This hour, I'll talk to a senator who is part of a bipartisan push to get the President to back off.

[17:59:54] And Trump's testimony. Stormy Daniels' lawyer asks a judge to let him question the President about his possible role in the infamous hush payment to the porn star. Will Mr. Trump be forced to tell all under oath?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.